An hour ago (820 am EDT), it was announced that Bitcoin just split in two, with a new one born called Bitcoin Cash.
After two years of disagreements over network scalability issues, a user-initiated hard fork occurred, creating two versions of bitcoin. The one we know it as today still exists (BTC), and the new one, called Bitcoin Cash (BCC), was born.
Bitcoin Cash occurred because a small faction of the bitcoin community didn’t approve of the SegWit2x proposal, designed to increase the bitcoin block size by 8x. (SegWit will be implemented later this month)
Today’s hard fork is perhaps the most pivotal moment in the storied history of the world’s most valuable digital currency. Some exchanges, like Coinbase and BitMEX have made it clear they will NOT support Bitcoin Cash; others, like OKCoin and Kraken have informed users they WILL list the new token.
We have compiled some quotes from several CEOs which readers can find below.
Node40 CEO Perry Woodin
People who are going to benefit from Bitcoin Cash are the ones who see it as free money, so they can then invest in something else. It’s going to be a race to see who can sell it the fastest.
Coinsource CEO Sheffield Clark
When we look back 30 days from now, this is essentially going to be a non-event. We have absolutely no plans to integrate Bitcoin Cash at our machines at this time.
Dash Core CEO Ryan Taylor
There are many misconceptions about Bitcoin Cash and what it represents. To be clear, Bitcoin is not forking. Rather, some developers have created a new digital currency and formulated an effective means of distributing it, by giving it to everyone with an existing Bitcoin balance.
Nonetheless, the multi-year dispute over how best to increase Bitcoin’s transaction capacity is what led to this moment. Bitcoin lacks an effective governance model to resolve contentious issues, and this is clearly deterring technological progress. When an issue as simple as whether to increase the block size can lead to years of stagnation, something needs to change. In my opinion, governance is an issue that the Bitcoin community needs to take more seriously.
While the markets will ultimately decide, I think there is little chance that Bitcoin Cash will be successful in the long-term. It may have increased capacity, but several issues remain. First, Bitcoin Cash has not solved scaling. It has merely kicked the can down the road with slightly larger blocks, but still lacks a credible technology to scale to massively larger numbers of users. Second, Bitcoin will retain the network of integrated services that make the Bitcoin network useful to businesses and consumers. With no substantial enhancements compared with Bitcoin, Bitcoin Cash is unlikely to be integrated into those same services, given the substantial expense for businesses operating them to do so.
Aragon Co-Founder and Project Lead Luis Cuende
How will this affect the future of Bitcoin and Cryptocurrencies more generally?
I think it will be a huge stress test on community governance — forks are a way to vote, to reclaim independence, and I really look forward to seeing how further development will continue and how the community will react
What consequence will this have on investors?
It depends, but probably making BTC holders more wealthy, since Bitcoin is better with SegWit. Plus, the people that were actively trying to stop development on Bitcoin and centralize it, will now have their own chain to do whatever they want with it. I think this will positively impact Bitcoin
What will the short term impact be? What will be the long term impact?
Short term, I believe Bitcoin Cash will be around for some time, but in the long term, I don’t see Bitcoin Cash going anywhere. Probably a fatal bug will crash the whole network (it already happened with Bitcoin Unlimited, Cash’s predecessor) or people will just lose interest in a currency engineered to look decentralized while being totally centralized
Coinsource CEO Sheffield Clark
When we look back 30 days from now, this is essentially going to be a non-event. We have absolutely no plans to integrate Bitcoin Cash at our machines at this time.
Dash Core CEO Ryan Taylor
There are many misconceptions about Bitcoin Cash and what it represents. To be clear, Bitcoin is not forking. Rather, some developers have created a new digital currency and formulated an effective means of distributing it, by giving it to everyone with an existing Bitcoin balance.
Nonetheless, the multi-year dispute over how best to increase Bitcoin’s transaction capacity is what led to this moment. Bitcoin lacks an effective governance model to resolve contentious issues, and this is clearly deterring technological progress. When an issue as simple as whether to increase the block size can lead to years of stagnation, something needs to change. In my opinion, governance is an issue that the Bitcoin community needs to take more seriously.
While the markets will ultimately decide, I think there is little chance that Bitcoin Cash will be successful in the long-term. It may have increased capacity, but several issues remain. First, Bitcoin Cash has not solved scaling. It has merely kicked the can down the road with slightly larger blocks, but still lacks a credible technology to scale to massively larger numbers of users. Second, Bitcoin will retain the network of integrated services that make the Bitcoin network useful to businesses and consumers. With no substantial enhancements compared with Bitcoin, Bitcoin Cash is unlikely to be integrated into those same services, given the substantial expense for businesses operating them to do so.
ZenCash Co-Founder Rob Viglione
Bitcoin scaling has been a complicated issue for the past few years, so it’s nice to see forward progress, even the situation is a bit sloppy. Most participants in the ecosystem will be upgrading with the BIP-91 activation for Segwit2x, but there’s some support for Bitmain’s Bitcoin Cash “User Activated Hard Fork” (UAHF) that launched at 12:20 UTC today.
The good news is that we’ll see experimentation along two distinct preference clusters. Rather than forcing one way or another, we can see how each idea unfolds in real life. This is the major advantage of cryptocurrency markets: Instead of bickering over theory and assumptions, we can just bring ideas to market and see how they perform.
Still, there are pros and cons to everything. The downside of a split is that Bitcoin loses part of its ecosystem, and network effects are so important to this industry. That said, this isn’t a zero-sum game and it’s more than possible to see both chains flourish in parallel.
